Kuala Lumpur palm oil took the limelight early on Monday, with US markets closed for the Labor Day holiday.

And the vegetable oil used its opportunity to jump to a three-week high, despite some mixed signals from abroad.

The positive was the strong close by the soy complex in Chicago on Friday, when soybeans for November delivery ended 2.6% higher, while soyoil itself, palm oil's main rival, added 1.6%.

Prices were supported by a roaring grains complex, following cuts by Informa Economics to its estimates for the US soybean and, in particular, corn harvests. Many traders believe soybeans will have to get more expensive to keep up their end in the next battle for US plantings.

Dalian roll? 

More mixed news for vegetable oils, however, emanated from China, the world's biggest vegetable oil importer.

Certainly, investors on the Dalian exchange in China were not in mainly, but not wholly, exuberant form. Was there a roll going on, from the front to second contract?

The September lot was down 1.4% as of 07:10 GMT, while the December lot added 1.1%, extending its premium, with other later contracts higher too.

But a forecast jump in China's soybean imports in 2010-11 did not look wholly positive for vegetable oils.

Crushing its own

Sure, the forecast of a rise to 55m tonnes in soybean bookings, from 52m tonnes in 2009-10, according to Cargill Investment trader Frank Zhou, looked favourable in demonstrating demand for oilseed itself.

But the trouble for palm oil is if this rise means China will be doing more of its own crushing, and producing its own vegetable oil products, rather than importing them.

Mr Zhou indeed forecast a fall in China's soyoil imports on the way.

However, in Kuala Lumpur, some investors also seized on thoughts that the Asian holiday season may disrupt Malaysian palm oil production, while raising demand.

In Malaysia itself, financial markets may close as early as Thursday for the festival of Eid Al-Fitr.

Some short-covering ahead of the holidays was also seen as fuelling the rise in benchmark November palm oil contract of 1.4% to 2,605 ringgit ain early afternoon deals.

Wheat weather 

In the grains complex, European trading may be subdued by the lack of influence from Chicago.

(Although, as one trader noted to Agrimoney.com last week, Paris's Matif market was now the "bell ringer" in the wheat market, being closer to the affected former Soviet Union, and indeed European Union, production.)

However, weather may play a part. Many parts of Europe, and notably the UK, look set for further rain to disrupt the later stages of the wheat harvest.

"Recent heavy rains likely means further delays to the winter wheat harvest through central and northeast Europe," Meteorlogix said.

Russia and Ukraine also received rain over the weekend, although more is needed in eastern Ukraine and central Russia to underpin prospects for autumn-sown crops.

Australia too had rain, although not so much in the Western Australia grain belt where it is needed.

"Flooding rain hit north east Victoria over the weekend," Luke Mathews at Commonwealth Bank of Australia said.

"However the heaviest falls were outside of major grain growing regions. For the most part, the weekend rain was beneficial to east coast grain crops."